Individuals aged 80 years and older constitute the fastest growing segment of the population worldwide, leading to an expected increase in dementia cases. Education level and treatment of vascular risk factors has increased during the last decades. We examined whether this has influenced the prevalence of dementia according to DSM-III-R using population-based samples of 85-year-olds (N = 1065) examined with identical methods 1986-87 and 2008-10. The prevalence of dementia was 29.8% in 1986-87 and 21.7% in 2008-10 (OR 0.66; 95%-CI: 0.50-0.86). The decline was mainly observed for vascular dementia. The proportion with more than basic education (25.2% and 57.7%), and the prevalence of stroke (20% and 30%) increased, but the odds ratio for dementia with stroke decreased from 4.3 to 1.8 (interaction stroke*birth cohort; p = 0.008). In a logistic regression, education (OR 0.70; 95%-CI 0.51-0.96), stroke (OR 3.78; 95%-CI 2.28-6.29), interaction stroke*birth cohort (OR 0.50; 95%-CI 0.26-0.97), but not birth cohort (OR 0.98; 95%-CI 0.68-1.41), were related to prevalence of dementia. Thus, the decline in dementia prevalence was mainly explained by higher education and lower odds for dementia with stroke in later born birth cohorts. The findings may be related to an increased cognitive reserve and better treatment of stroke in later-born cohorts.